Abu Dhabi's largest Islamic lender meets expectations after making $111m in three months to March 31
Abu Dhabi Islamic Bank, the largest sharia-compliant lender in the emirate, met analysts' expectations as it posted a 20.4 percent rise in first-quarter net profit on Monday.
The lender, which said earlier this month it was buying much of Barclays' retail operations in the UAE, made a net profit of AED409.5 million ($111.5 million) in the three months to March 31. That was up from AED340.1 million in the prior-year period, it said in a bourse statement.
The results were in line with the average estimate of three analysts, who forecast profit of AED411 million in a Reuters poll.
ADIB said April 6 it would buy the retail business of the British lender for 650 million dirhams, subject to regulatory approval, as Barclays became the latest foreign lender to exit the country's highly-competitive consumer banking space as new capital rules make banks evaluate their global footprint.
ADIB attributed its profit hike in the first quarter to an 18.1 percent year-on-year increase in lending, with total loans standing at AED63.8 billion at the end of March 2014.
Bank lending across the UAE banking system has been buoyant in recent months as the economy rebounds from a real estate crash and debt problems at a number of Dubai government-related entities - December saw the fastest lending growth in nearly four years, before dipping slightly in January, central bank data showed.
Over the same timeframe, deposits grew 21.4 percent to AED77 billion.
The profit increase came despite a 16.7 percent increase in credit provisions to AED216.4 million in the three months to March 31.
The fact the bank could grow its profits healthily while still maintaining a conservative stance towards provisioning showed the strength of the bank's core business, chief executive officer Tirad Al Mahmoud said in the statement.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.